KAPLAN Superannuation & Retirement planning assignment May 2010

I've been working on this for so long now, its making less sense each time I look at it.
I am thinking that question 6 should include a TTR for Karen, as the build up to this involves the Salary sac and TTR. But I feel that this amount is then assessable under income and assets tests for Michaels age pension.
Has anyone submitted not including a TTR and passed?
I think I'm going down the wrong tracks here....
Please help!

I have successfully completed this assignment.
I did submit a TTR in question 6, as the question asks that you make recommendations for both Michael & Karen.
I found that all previous questions in the assignment lead to question 6.
Feel free to email me any question you have, and I will do what I can to help you.

I have emailed a couple of you who've put up emails. I have some friends who've done the SRP unit and assignment, but I'd like to help others to get the latest one right before I open this unit (I've done units 1-3)

The people in the one's I have are Karen and Michael - has it changed in the last couple months?

eg. I have "Michael is age 66 and Karen is age 62. Both are in very good health and have full private hospital cover with a $1,000 excess. Karen is an only child and she is very close to her mother and father who are both alive and quite active at ages 86 and 84 respectively. Michael’s parents and three sisters are also all alive and healthy." bla bla bla

1.) Q2 retirement capital + gap, I've read multiple posts on that one,can't figure out the logic with it (PV normally used), do you have to also mention strategies?. I would have thought that they would have discussed this further, as its pretty important, likewise with gap analysis. Would love to know what logic was used?

2.) Contributions part of Q2 assumed its nothing more than summing up nornal contributions part (concessional, NCCs etc) and then for next part recommend salary sacrifice, NCC types, spouse, co-contributions etc. Haven't made any $ value recommendations

3.) TTR strategy + salary sacrifice, do you also use 50k ALC assuming that Karen is the sole earner, 25k (50% share) and d exclude Michael out of it with table then dribble the rest if it does or doesn't stack up for them?

4.) Q5 2 strategies younger spouse and allocated pension, do they want current situation or when both have retired? Do you need to also do calcs for it, guessingpnly q6 part

5) Q6 have been using a template that was floating around, how much detail do they want with it, cash flow before with Karen working, post retirement one. Final retirement, the recommendations would have been implemeneted before Michael had retired, assuming that he had worked up to 30/6. (I know you ignore it for sake of q)

Would appreciate some help with it, as I want to get it in by the end of the week.

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Hey,

Just to start with I'd thought I'd let you know that I am currently awaiting my results for this assignment, so everything I say may not be quite right. But it's what I've done with my assignment.

1) I did an excel table showing the expected cash flow position of the couple over their lifetimes. I didn’t address any strategies available to them as it does not ask for strategies, rather it asks to analyse. I simply stated what the capital gap was and why that might be the case.

2) Part C of this question is addressing your knowledge of the types of super contributions (CC and NCC) along with the underlying types of NCC and CC. Part D is asking for specific reference to advantages and disadvantages along with the rules and restrictions for NCC and CC. In Part E I made specific reference to what contributions would benefit Michael and Karen, and kept my answers general without giving a dollar value.

3) I don’t know what you’re referring to with ALC? There’s an example on page 6:10 which I followed.

4) I took it as current position. As the strategies I mentioned involved Michael maxing out his eligible age pension. I did not do calculations as my assignment was lengthy enough as it was.

5) I found it helps to make assumptions (a lot of mine made it easier to work out calculations eg Michael and Karen both retire at end of financial year). Just make sure you list assumptions. Kaplan screwed me over last assignment because they ‘couldn’t find’ my assumptions – even though they were listed under the title assumptions at the start of the questions. For this you need to read question 6 carefully as they list everything they want you to show and I think they cover it all pretty thoroughly. Plus you should really look at the first sentence under question 6. I didn’t see it and it changed my advice completely (I only found it the night before).
I find it easier to split my advice up into sections: before Karen’s retirement and after Karen’s retirement.
I did include cash flow tables and showed all my working out.
Hope this helps. I know Kaplan are pretty useless when it comes to responding to your questions and clarifying, but I think with this assignment they laid it out nicely.

PS I will not be forwarding my assignment on to anyone, so stop asking me and sending me private messages asking to ‘swap’ for your FFP and Risk assignments. I’ve completed those assignments as has everyone else who is doing this assignment. I’m happy to help if you post questions in invested as it not only helps you out but others as well (I don’t check often but will try and respond).

As with everyone else on this thread i'm attempting to complete the Super and Retirement planning assignment.

For question 5 is everyone using the pension, deeming and assets threshold rates from the stundy notes or are you using the rates provided in the quick refrence guide jan-mar 12 that was provided with the study notes?

It doesn't matter which rates you use as long as you mention in your assumptions which ones were used and as long as you maintain those rates throughout your assignment.

I believe that the notes should have been updated (Im presuming since the assignment is dated May 2010 that Kaplan hasn't tweaked this in over 2 years) to include the new rates as well as any new legislation that has come about.

I did use updated rates and threshholds because I found that it worked in their favour.

It doesn't matter which rates you use as long as you mention in your assumptions which ones were used and as long as you maintain those rates throughout your assignment.

I believe that the notes should have been updated (Im presuming since the assignment is dated May 2010 that Kaplan hasn't tweaked this in over 2 years) to include the new rates as well as any new legislation that has come about.

I did use updated rates and threshholds because I found that it worked in their favour.

kwakker

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Hi guys,

I seriously need some help with Q2 and Q5.

In Q2... How did you set out showing the capital that the couple will need? I don't seem to be able to get the questions started. Any suggestions would be really appreciated.

And Q5... The calculations, I'm confusing myself. Do I show my working for the deeming, income test and asset test? Ask the question is asking in regards to their current investment portfolio, I'm having trouble working out there income. Once again any tips?

I've had so much trouble with this assignment and spent so much time on it that I now have only question.......

Am I on the right track if I just take it as given that all the questions in the assignment relate to an extremely bad example in which I am asked to comment and give TTR, Age Pension, super, etc on a couple who's situation is not really suited to any of them particularly well???

I think i ve got question 1 and 2 pretty much covered but its hard to make recommendations on strategies as it feels like the answers to latter questions might contradict them. Hopefully if you can get Q1-5 done then the 6th should be just putting them all together as the scenario is that Micheal has retired and Karen will in 3 years. Best of luck to all.

I've had so much trouble with this assignment and spent so much time on it that I now have only question.......

Am I on the right track if I just take it as given that all the questions in the assignment relate to an extremely bad example in which I am asked to comment and give TTR, Age Pension, super, etc on a couple who's situation is not really suited to any of them particularly well???

Hi Suzi and others....
Im in the same boat here...Completely stuck on Q 6 - SRP1 - any help with the last answer is appreciated. All other subjects and question done but just stuck on the last one!
Its taken WAY WAY TOOOO long to get this far ! Any assistance to get this 'monkey off my back' would be very much appreciated.
Thanks
Kath

Is there anyone doing a superannuation assignment on new Kaplan platform. Under the new Kaplan platform the assignment and Exam has to be finished within 12 weeks. I'm currently looking for a study partner so that I can share my ideas and start my assignment. My client's are George and Rebecca Brown in my assignment. Sounds familiar to anyone. Plzzzzzz help

OK, I have 2 days left to complete SRP and, despite spending many many hours on this, I'm still not getting anywhere.

I guess my issue now is with Q6. I basically cannot come up with a very good solution for the Lockharts and don't know where I'm going wrong.

I believe Karen has about 25 years to live, they can live off approx $50k a year and, no matter what you do in the last 3 years of Karen's work, they're gonna both be in retirement with about $500,000 in super between them.

Assuming a growth rate of 7% and CPI at 3%, their funds could only conceivably last around 13 years.

Should I not be factoring in CPI? Should I assume a higher growth rate? Should I assume one of them will die sooner? Should I factor in death benefit?

I have felt that the subject notes on this whole subject have been sketchy at best and this assignment is very general and ambiguous. I'd really appreciate all the help I can get!!!!

Yep, Karen has a predicted lifespan of around 87. I worked to this for the couple.

You are looking for a ttr for Karen,get Michael to retire, juggle super and ttr super in years up to retirement to balance the budget at 50k a year.

Expected ending super is in the 500-600 mark.
I used the money smart retirement excel planner to estimate super funds. This factors CPI.

Place in your assumed return on super funds. Note the word assumed.

So if you are in a bind, my advice is to make an assumption on rate of return to help you out. Since rerunning the calculations for 4 yrs is a drag.
If you haven't done so, make use of excel to project and calculate all incomes, tax and centrelink outcomes so you can input starting scenario and then get 4 years of projections and final retirement outcome. This helps a lot and speeds things up but requires a good few hours setting it up.

At 7% they should be stylin'
I used 6.3% for Karen and 5.7% for Michael and it was hard.

Make use of centrelink payments. Max the payments by juggling super between the couple at key points. Make use of strategies in final chapter in srp notes.

Both should be able to survive to projected life expectancy as stated in tables in quick reference guide.

Make use of the Ffp notes, they explain things clearer and you can also make use of case study in Ffp for help on the soa. It says don't need one, said same for ip1. It's way easier if you just do an soa and refer to Ffp, IMHO. Since you have a good framework to go off.